This research is about the analysis, design and implementation of a new two degree-of-freedom (DoF) capacitive micro-electro-mechanical system (MEMS) velocity sensor. A first prototype MEMS velocity sensor was fabricated using piezoresistive transducer technique to prove the concept; however this proposed sensor is susceptible to temperature changes and has lower sensitivity. The sensor presented in this research has been specifically designed with capacitive transducer and actuation technique to avoid such drawbacks. This velocity sensor is envisaged for active vibration control of distributed flexible structures such as thin plates and shells. It can be used with a piezoelectric patch actuator to construct dual and collocated sensor-actuator pair, in order to implement direct velocity feedback control loop. The sensor comprises an internal feedback loop, which produces a sky-hook damping effect on the principal mass-spring-damper system of the sensor. In contrast to standard accelerometer vibration sensors, the frequency response function of the velocity sensor has three important properties for the implementation of stable velocity feedback loops, which are an advantage introduced by the sky-hook damping effect: First, at low frequencies below the fundamental resonance of the 2-DoF, the output of the sensor becomes proportional to the velocity of the sensorâs frame; second, around the fundamental resonance of the transducer, it is characterised by a flat amplitude spectrum; and third, above the fundamental resonance of the transducer, it is characterised by an amplitude roll-off with only a 90o phase lag. Thus this sensor produces the desired velocity output up to a cut off frequency and then produces a filtering effect with little phase lag. In this way it can prevent the strong control spillover effect that characterise velocity feedback loops using piezoelectric strain actuators.